Gold dips to over two-month low on global cues, muted demand

Taking weak cues from global market and slackened demand from jewellers, gold continued its falling streak for the seventh straight day and prices plunged by Rs 180 to trade at over two-month low of Rs 26,250 per 10 grams.

Silver slipped below Rs 36,000 mark by falling by Rs 320 to Rs 35,750 per kg on reduced offtake by industrial units and coin makers.

Bullion traders said a weakening trend in global market on renewed speculations that the Federal Reserve will raise US interest rates in December, eroding demand for the precious metals, kept pressure on the prices.

Besides, slackened demand from jewellers and retailers too pulled down gold prices to over two-month low, they said.

Globally, gold fell 0.87 per cent to USD 1,107.50 an ounce and silver by 1.28 per cent to 15.06 an ounce in New York in yesterday's trade.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity slumped by Rs 180 each to Rs 26,250 and Rs 26,100 per 10 grams, respectively, a level last seen on August 17. It had lost Rs 835 in last six days.

Sovereign however remained flat at Rs 22,300 per piece of eight grams in scattered deals.

Meanwhile, Prime Minister Narendra Modi today launched three ambitious schemes to reduce the physical demand for gold and fish out 20,000 tonnes of the precious metal worth USD 800 billion lying idle with households.

The Gold Monetisation Scheme (GMS), 2015 will offer option to resident Indians to deposit their precious metal and earn an interest of up to 2.5 per cent; while under the Sovereign Gold Bonds Scheme, investors can earn an interest rate of 2.75 per cent per annum by buying paper bonds.

Modi also unveiled the first ever Indian gold coin & bullion, bearing national emblem Ashok Chakra on one side and Mahatma Gandhi's image engraved on the other side.
Following gold, silver ready plunged by Rs 320 to Rs 35,750 per kg and weekly-based delivery by Rs 475 to Rs 35,375 per kg.

Silver coins declined by Rs 1,000 to Rs 49,000 for buying and Rs 50,000 for selling of 100 pieces.